Back-to-School: How to Use the Past to Shape the Future
With the back-to-school (BTS) retail season in full swing, and seemingly getting longer each year, Kantar Media has taken a look at how advertising spending has evolved over the past few years. The retail sales period has now emerged as the second biggest ad spending event of the year, with retailers and nonretailers alike getting involved.
For 2016, advertising spend for BTS reached $251 million, up 12 percent from $224 million in 2015. And at this level, advertisers are certainly getting their money’s worth. According to Kantar Media’s TGI data, U.S. adults with school age children 18 or younger are 62 percent more likely to signal advertising as the important determinant of their purchasing behavior. Similarly, those with a child that began college within the last 12 months are 32 percent more likely to signal reputation of a brand as the important determinant of their purchasing behavior.
Kantar Media defines BTS advertising as creative making direct mention of the event, or having a clear school/college theme promoting things like school supplies, dorm room furnishings or showing students in a school setting. Spend figures are based on TV, radio, print, cinema, internet display (desktop and mobile) and online video.
Of note, the first ads for BTS appeared slightly earlier in 2016 than in previous years. We typically see the first wave of ads drop right after July 4, however, in 2016 a few marketers opted to start earlier and launched campaigns the last week of June. Despite the quick start, the weekly pace of 2016 ad spending actually lagged 2015 throughout the month of July. As the calendar turned to August, weekly spending totals moved ahead of prior year levels and retained their edge all the way to the end of September.
Retail Still Reigns, but Wireless Gains
As the world becomes more fixated on all things digital, the leading ad categories for sale events like BTS are experiencing shifts. While retail has always been the clear leader for BTS, digital products like mobile phones and tablets are now being marketed as a necessary “school supply” for students. And though retail continued to lead the way in 2016, the category reduced spend by approximately 9 percent and lost share points compared to previous years — mainly to wireless telecom, which grew spend more than tenfold.
Indeed, retail accounted for a 72 percent share in 2015, however, in 2016, it accounted for only 59 percent. At the same time, wireless telecom, which usually lags retail by a very large margin, started to close the gap. The category jumped from 2 percent share of spend in 2015, to 15 percent share in 2016, emerging as the runner up category for BTS spend.
Wal-Mart more than doubled its spend from the previous year, ranking it as the No. 1 spending advertiser overall. Conversely, other top advertisers slashed spend and fell in the ranks. Target, which has ranked No.1 in recent years, cut spending by $2 million, while Kohl’s reduced spend even further, lowering by $10 million. Despite the cutbacks, both retailers still invested enough to rank in the top 10.
One newcomer for BTS in 2016 was eBay, whose ads were more targeted towards college students. eBay used the messaging of “school smarter” to promote great deals and alternative ways for college students to supplement their finances. With eBay trying to market itself as direct competitor to Amazon.com, we expect it to rise in the rankings this year.
Studying Paid Search
In addition, we looked at paid search spend for campaigns during the 2016 BTS season. The top advertisers sponsoring BTS keywords came from a mix of clothing, school supply and computer retailers — traditional products one would expect to be promoted for BTS.
Not surprisingly, the top four advertisers for paid search overlapped from the group of top spenders on traditional media. However, because paid search gives the opportunity to those with smaller budgets to grab a piece of the BTS pie, we found lesser known companies like frenchtoast.com and schoolspecialty.com ranking among the top 10.
Online school supply retailer School Specialty found the sweet spot with the most efficient campaign. The company had among the highest clickthrough rate and ranked by far lowest for cost per click for the BTS keywords measured, all while spending less than half of what some of its larger competitors did.
What Can Retailers Do?
As we approach the final stretch of BTS 2017 and look ahead to next year, retailers can best prepare by going all out on the advertising front. If a company’s sweet spot is school supplies or clothing, there's no such thing as too much advertising. As shown by our TGI data, parents are heavily influenced by campaigns in their BTS shopping. Parents are drawn to brands they see consistently advertised, so retailers are encouraged to spend on this time period.
Additionally, with ads being rolled out earlier and earlier each year, it's important for retailers to start planning their strategy for next year now. By being top of mind when parents begin to think about BTS shopping, retailers can get ahead of those brands that choose to roll out ads later in the season.
Lastly, while big-box retailers continue to dominate traditional advertising, smaller companies can gain an advantage by using paid search. The use of paid search allows smaller companies to maximize their budget and reach the consumers they're looking to target. As evidenced by schoolspecialty.com, paid search lets smaller retailers truly get a bang for their buck.
Jon Swallen is the chief research officer of Kantar Media.